Utilities can meet state renewable portfolio standards—and reduce greenhouse gases—by burning biomass fuel. Whether utilities are prepared to jump into the biomass game, however, depends on how effectively they can manage fuel risks.

Traditionally, utility shareholders and their utilities have a bias toward supply-side resources as opposed to demand-side reduction programs. Reductions in demand may result in excess supply-side resources that are likely to be excluded from rate base because they do not meet the “used and useful” standard. However, there is a solution: Allow energy utilities to benefit from earnings rewards for demand-side reduction. From an earnings perspective, such a solution would place demand-side alternatives on par with supply-side projects.

Volatility in energy prices is both a scary and wonderful thing. It brings risks that must be managed under uncertain future conditions. It also brings opportunities to profit from price movement and competitive market advantages exploited through strategy, skill and luck. Just how good the outcome of such volatility can be depends on how well each market participant studies the fundamentals, manages uncertainty and remains flexible.

(December 2007) John Ferguson responds to “Creating the Perfect Regulator”: "Burr identifies four fundamental goodness traits: omniscience, Solomonic wisdom, clairvoyance and righteousness. Inherent in these traits, but not specifically addressed by Burr, is the ability to recognize and reject advice from those interested in telling the regulator what the advisors think the regulator wants to hear instead of what the regulator should hear."

Freakonomics author Steven Levitt compares the carbon buildup to horse manure in the 1890s. “Everything we know from the past and what I know from talking to scientists tells me technology is likely to be the solution,” he says.

American Electric Power named Michael Rencheck senior vice president and chief nuclear officer for its D.C. Cook Nuclear Plant in Bridgman, Mich. The American Public Power Association elected Roger B. Kelley to its board of directors. OGE Energy Corp. named Danny P. Harris as COO. Glen Justis joined Deloitte & Touche LLP as a director in the global energy markets group of the organization’s regulatory and capital markets practice. And others...

Once upon a time, the U.S. Congress started a game of hot potato. The potato, otherwise known as the EPAct Title XVII Loan Guarantee Program, has been bouncing around Washington, D.C., since 2005. But now that the industry is getting a good look at the potato, it looks decidedly funky—stuffed with caveats and half-measures. Whether that’s good or bad depends largely on whether you believe the government belongs in the potato game in the first place.

We’ve heard it all before, but the issue isn’t going away: Reliability of power, from generation to distribution, remains a primary concern of the utility industry. But the current verdict is mixed, depending upon which experts you talk to. Aging equipment is a ticking time bomb—except when it isn’t. NERC CIP standards are driving reliability improvements—except when they aren’t. Maintenance is key—except where monitoring and automation are more important. And regulators should stand aside and let the market drive reliability improvements—but economic incentives wouldn’t hurt.

Policy mandates might erode public support for green-energy efforts, even in an environmentally conscious state like California, by frustrating consumer demands instead of allowing them to be fulfilled more efficiently. Recognizing real consumer value will help policy makers develop economically rational green-energy regulation.

Was restructuring a success? Prices provide a dispassionate analysis, showing that restructuring was poorly designed, badly executed, and focused on the wrong part of the grid. With those lessons learned, it’s time to explore ways to move forward.